Is it unnecessary to purchase auto damage insurance after several years?
3 Answers
Whether it is necessary to purchase auto damage insurance depends on the model of the vehicle and the financial situation of the owner. Below are the relevant details: Age limit: Private vehicles older than 8 years are generally not covered. Although it is possible to purchase auto damage insurance for vehicles over 10 years old, the coverage amount will be very low due to significant depreciation. Few insurance companies are willing to cover vehicles over 10 years old, and compensation is provided on a proportional basis. Definition of auto damage insurance: Auto damage insurance refers to the compensation provided by the insurance company within a reasonable range when the insured or an authorized driver causes damage to the insured vehicle during an accident. Coverage scope: This insurance does not cover theft, robbery, standalone glass breakage, standalone wheel damage, etc. Therefore, not all vehicle damages will be compensated by the insurance company after an accident.
I've been driving a Volkswagen for seven years now. When I first bought it, I opted for collision insurance, paying over a thousand yuan in premiums every year. Now that the car's value has dropped to around 30,000 to 40,000 yuan, renewing the insurance doesn't seem cost-effective anymore. Due to rapid vehicle depreciation, the compensation from the insurance company is based on the current market price—at most, you'd get 10,000 to 20,000 yuan after an accident, yet the premiums remain just as high. I've done the math myself: for cars older than six years, the depreciation rate is too steep, and the premiums paid over a few years could practically buy another used car. Besides, I drive carefully, mostly in the city where the risk is low, and I choose good road conditions for occasional long trips. It's more practical to invest the saved money in regular maintenance, like changing tires or checking the brakes. My advice is to consider your car's brand and condition—for mid-to-low-end cars older than five or six years, collision insurance isn't necessary. It saves both hassle and money.
As a veteran driver with twenty years of experience, I think vehicle damage insurance was quite useful in the first few years, especially for new cars prone to scratches or minor accidents. But after the fifth year, the car depreciates significantly, and the residual value becomes low, making the premium payments not worth it. My own Toyota is now nine years old, and I stopped insuring it long ago. As long as you don’t drive on rough roads or speed every day, the probability of accidents is low. An older car is fine as long as maintenance is kept up—I personally check the engine oil and brake pads monthly to avoid major repair risks. Vehicle damage insurance mainly covers the car’s own losses, and repairs for older cars are cheaper compared to expensive new cars. Most people give it up after seven or eight years, keeping only compulsory insurance. Remember, good driving habits are better than insurance for preventing risks.
